In "You've ALWAYS Had The Power! Creating Uniform Residential Appraisal Reporting Standards (URARS), I suggested we start with the "Clarification of Scope of Work Addendum" (COSOW) as a template for the URARS for several reasons. First, the Scope of Work within the URAR is broad and unspecific and second, the COSOW defines many terms and states the appraiser’s actions in a format that is "uniform".Download COSOW.pdf
Uniform implies consistency and that is what is needed for the URARS. Regardless of the property’s location, physical attributes or local custom, the URARS (and the appraiser’s action) must be the same.
Does this mean the URARS will not allow for flexibility if needed? Absolutely not, the URARS is not about being "inflexible". It is about providing a framework or standard for analysis of common as well as unusual situations.
What will make it different?
The URARS doesn’t remove the appraiser’s ability to exercise judgment for a unique assignment, only that in employing a technique, it must be consistent with the methodology that other appraisers would use in a similar appraisal problem.
Through "uniformity" your definition of urban, suburban or rural will be same as my definition. When you define a neighborhood, it will be described using the benchmarks and guidelines that I would. Uniformity removes subjectivity via "de facto standards".
Through the URARS, those that rely on the appraisal (underwriters, clients, regulators, the secondary market, etc.) will have reference to and common understanding of the same terms, techniques and applications. As a result, appraisals will be measurable and verifiable.
More importantly, the URARS will provide a defensible document, one that is representative of "the actions of our peers" and "generally accepted appraisal practice", the same standards of performance identified within USPAP and by the secondary market.
If we build it will the come?
Appraisers are skeptics by nature and given what the industry has gone through since FIRREA (the document that was to solve all of our problems) it is reasonable that they should be. FIRREA and USPAP did solve some problems, but they also created some "intended consequences".
Why will the URARS work? While I will be the first to admit that it may not, I also believe that it is a viable solution that involves a grassroots effort on the part of those in the industry, with a shared view (to some degree) as to what would be in the best interest of the profession and a vested interest in making it happen to improve the current situation
There will be "doubters", however, in less than a week 31,000+/- appraisers from across the nation, with different opinions, credentials, training, etc., signed the HVCC petition. They worked together to achieve a single purpose, getting our voices heard.
How many are enough?
How many "opt-ins" do we need to "represent the actions of our peers"? For the sake of debate, assume there are 75,000+/- residential appraisers nationally that receive The Appraisal Press and that 5,000+/- of those appraisers are members of forums and or read The Appraisal Scoop.
With articles and posts, can we get 100 appraisers (two from each state) to join the URARS group on "The Appraiser’s Water Cooler ",just to get things started? That seems reasonable. If those same 100 will contact and sign-up 4 additional members, we would have 500 people involved, which should provide a reasonable cross-section of ideas and opinions. Would others sign-up simply from the articles on The Appraisal Scoop, in The Appraisal Press, e-mails they receive, posts on the forums, word of mouth, etc.?
While it may take some time (and effort) to get a majority, I am not sure that one is needed. After all, if I can say 10,000 appraisers nationally subscribe to this standard and that the support for its use in an appraisal can be found at URARS.org, I have a defensible position. It becomes incumbent on the reviewer, commission, underwriter, client, etc., to cite a more widely accepted, accessible and validated standard. Where will that come from?
The initial key is to create "de facto standards" and develop a website to make them accessible, get feedback, debate their merits and provide references, examples and logic, so that they can be used in our defense as "the actions of our peers".
If we use good reference sources such as The Appraisal of Real Estate, The Essentials of Real Estate Economics, Boyle’s Appraisal Terminology, federal guidelines that define rural communities, ANSI Standards, etc., what arguments will others have to support their position?
Where’s the beef(s)?
Would referencing the URARS (by including the URARS addendum in each report) and having a link in each report to the URARS.org website (with its expanded standards, examples, etc.) provide a single point of reference for anyone to access "the actions of our peers" and "generally accepted appraisal practices" referred to in USPAP and most appraisal guidelines? No doubt about it.
Would the creation of the URARS provide the mortgage industry with a "measurable and verifiable" set of "de facto standards" to eliminate questionable practices and to raise the bar, forcing reviewers, commissions, and users of appraisal services to accept the standards defined within the URARS? I would think they would have to, absent a "better defined and referenced source".
In part three, we’ll look of the Clarification of Scope of Work addendum, consider topics for "de facto standards" and start to identify areas that should be modified, expanded, referenced, etc. For those that want to be a part of this process, even as a "lurker", please take the time to join the URARS group on The Appraiser’s Water Cooler.
You can signup here. Click here This will keep you up to date with the process and provide a place for feedback to raise issues and make suggestions. Please invite your friends and colleagues to join as well. The more we get involved, the better the end result will be.
In less than a week 31,000+/- signed the petition against the HVCC because a la mode made it readily available to them, the "taking points were clear" and the petition represented something we all could agree on as a start in the right direction, The Right Start. "What if?"
Next up - Part Three: Deconstructing the Clarification of Scope of Work and creating the first draft of the URARS addendum.
Click here to join in on the "URARS" discusson on the Appraiser's Water Cooler.
AUTHOR: Patrick Egger is a Certified General Appraiser located in Las Vegas, NV. He teaches continuing education classes on the housing market, appraisal issues for real estate agents and appraisers. He can be reached at [email protected] Look for the new Outside The Boxes category for a collection of Patrick's articles on Appraisal Scoop!
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